How to start Bitcoin Cloud Mining
About Bitcoin Cloud Mining – your initial task is to find a reputable cloud mining provider, because it’s important to ensure you get reliable service. First you have to look for a provider offering a profitable contract.
Most bitcoin contracts are set up for a year, but some may have a longer or shorter term. For instance, some providers offer bitcoin cloud mining contracts from 6 months and up to 24 months duration.
You should purchase your first cloud mining contract from Hashflare or Genesis Mining. All you have to do is pay the upfront costs. These are usually paid in BTC, or you can pay in US dollars with PB Mining.
Some mining contractors will charge you fees throughout the contract in addition to the original payment, which can distort returns. Sometimes a mining contractor may go bankrupt, or a major fraud may be incurred (at the contractor’s expense).
What types of Bitcoin Cloud Mining are there, and what are their advantages and disadvantages?
There are two types of cloud mining:
Hosted Mining – where you send your mining machine to a company which provides electricity, cooling, and technical configuration. It is also possible to lease a mining machine.
Purchase Hashing Power – this is the most popular method of cloud mining. Here, you purchase a quantity of hashing power (at a quoted hash rate). This means you don’t have to own a physical or virtual mining machine (computer).
Now let’s analyze both these types of bitcoin cloud mining. Starting with the benefits of hosted mining: If you choose to host a bitcoin mining contract, you need to check if the provider is actually a registered company. If this is in fact the case, then there is a very good chance that you will not be cheated.
What are the advantages of Bitcoin Cloud Mining?
Higher profits are possible because cloud mining providers optimize everything, and thus they are likely to generate higher returns. The electricity bill will be much lower because there is lower power consumption overall.
As regards equipment issues, there will be no machinery to sell if bitcoin mining ceases to be profitable. In addition, you will not have the task of configuring bitcoin hardware. Cloud mining is less risky, because it minimizes the chances of being let down by equipment failure.
Cloud mining operations also involve better returns, because companies can negotiate better energy and hardware prices.
As for Bitcoin cloud mining disadvantages, you can always be unlucky and fall victim to a cloud mining fraud. And the operational costs for this form of mining are much greater because you have to pay for hardware management.
So what should you be taking into consideration?
You don’t own any equipment, which means you have none to sell. Some people have been unable to direct their hash rates towards their chosen mining pool.
Some providers will stop operating their cloud mining operations when the profitability threshold drops too low. And likewise, if the difficulties increase, or if new equipment becomes available.
A company can just quit the mining business, or simply abscond with the funds if they choose to do so.
Bitcoin cloud mining is a way to mine bitcoins without mining hardware. Even so, you still need to select the form of cloud mining which best suits your needs. You should decide what you are willing to invest, and how quickly you want to achieve an investment return (ROI). The higher the return on investment you are promised, the greater your risk of being cheated!
The return on your investment may be low compared to other alternatives such as buying and selling bitcoins. This may ultimately depend on the fees charged, the up-front costs and the market value of bitcoins during this time.
The advantage is that if the costs are reasonable, then your cloud mining operation will yield a good return. And if the price of bitcoins rises, you will most likely secure an excellent return on your investment.